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An American firm has been billed 1,000,000,000 payable in 1 year time Current spot and forward rate There are another 5 possible exchange rate scenarios
An American firm has been billed 1,000,000,000 payable in 1 year time
Current spot and forward rate
There are another 5 possible exchange rate scenarios in 1 year
$1.00
$1.10
$1.18
$1.20
$1.30
What would the hedged position be for the firm for the 5 possible 1 year exchange rate scenarios?
\begin{tabular}{|l|l|} \hline Spot exchange rate ($/) & 1.20 \\ \hline Forward exchange rate ($/)1 year & 1.18 \\ \hline \end{tabular}Step by Step Solution
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